Delaware IP Law Blog

In Quantum Loyalty Systems, Inc. v. TPG Rewards, Inc., C.A. No. 09-22-SLR-MPT (D. Del. Dec. 22, 2011), Judge Thynge recently considered plaintiff’s request that the court, in addition to damages and willfulness, bifurcate consideration of certain of defendant’s counterclaims. Specifically, plaintiff asked that the court “sever, dismiss, bifurcate or transfer” the following counterclaims because they were unrelated to the factual and legal issues surrounding plaintiff’s claim of infringement of the patent in suit:

- Count II: Declaration of Invalidity and Noninfringement of U.S. Patent No. 7,156,294 (“the ‘294 patent”);
- Count III: Declaration of Invalidity and Noninfringement of U.S. Patent No. 7,066,383 (“the ‘383 patent);
- Count IV: Attempted Monopolization;
- Count V: False Advertising under Section 43(a) of the Lanham Act;
- Count VI: Deceptive Trade Practices under Delaware Law;
- Count VII: Tortious Interference with Prospective Business Relations;
- Count VIII: Breach of Settlement Agreement;
- Count IX: Cybersquatting under the Anticybersquatting Consumer Protection Act (15 U.S.C. § 1125(d)(1));
- Count X: False Designation of Origin under the Lanham Act (15 U.S.C. § 1125(a)); and
- Count XI: Delaware Common Law Unfair Competition.

Id. at 4.

Defendant argued that the counterclaims were appropriate because “the issues for all of the claims, defenses, and counterclaims are substantially intertwined.” Id. Judge Thynge ultimately agreed. Regarding defendant's antitrust counterclaim, plaintiff argued, among other things, that bifurcation was appropriate because the court has already bifurcated damages and “much of the anticipated antitrust discovery will focus on damages and other economic factors and involve discovery matter unrelated to the patent case.” Id. at 7. Judge Thynge disagreed. “[T]he invalidity and unenforceability of the [patent in suit] is, in part, the basis of [defendant’s] antitrust claims as well as, two of its affirmative defenses to [plaintiff’s] infringement claim. Therefore, bifurcation here . . . would likely result in substantial duplication of evidence, and the presentation thereof, in two separate cases.” Id. at 9.

Continue reading "Bifurcation of damages and willfulness does not support plaintiff's request to bifurfacte defendant's counterclaims" »

On November 3, 2011 the District of Delaware judges signed an Order Relating to Utilization of Magistrate Judges. Among other things, the Order kicked off a one year Pilot Project “to evaluate Magistrate Judge utilization.” As part of the Pilot Project, the Clerk of the Court will randomly assign cases to Magistrate Judges. These matters will not initially be assigned to a District Judge and the Magistrate Judge will "be responsible for all pretrial management of the case, including determination of all nondispositive motions and scheduling." Within 60 days from assignment of the Magistrate Judge, the parties may consent to Magistrate Judge jurisidiction by filing Form AO85. If they consent, the case will remain assigned to the Magistrate Judge for all purposes, including trial. After 60 days, if the parties do nothing, or if a case dispositive motion is filed within that time, the case will be randomly re-assigned to a District Judge. These cases, however, will be eligible for referral back to a Magistrate Judge for discovery purposes, ADR or for case management through case dispositve motions. There are categories of cases that will not be assigned to a Magistrate Judge as part of this Pilot Project, including patent cases in which one or more “related” case is pending. See Standing Order, section D. As always, parties to a matter not directly assigned to a Magistrate Judge may also consent to Magistrate Judge’s jurisdiction by filing the Consent Form (Form AO85).

The Standing Order also clarified the procedure for objecting to Magistrate Judge Rulings and Recommendations. See Standing Order, section C.

Continue reading "New Standing Order Regarding Utilization of Magistrate Judges" »

In Ricoh Co. v. Oki Data Corp., C.A. No. 09-694-SLR (D. Del. Aug. 15, 2011), Judge Thynge interpreted Delaware’s long arm statute, which states that “‘any nonresident’ that ‘performs any character of work or service in the state’ is subject to personal jurisdiction[,]” to include counsel’s legal representation in this case — “[e]ven if the contact is as minimal as pro hac vice admission[.]” Id.at 8. Judge Thynge nonetheless held that Ricoh’s attempted subpoena of Oki Data’s pro hac vice counsel, a resident of Japan, was unenforceable due to improper service of process.

Continue reading "Magistrate Judge Thynge: Personal Jurisdiction over Pro Hac Vice Counsel" »

In Carl Zeiss Meditec, Inc. v. Xoft, Inc., C.A. No. 10-308-LPS-MPT (D. Del. Apr. 5, 2011), Judge Thynge recently granted the plaintiffs’ motion for leave to amend their complaint. After the defendant, Xoft, answered plaintiffs’ first amended complaint, Xoft was acquired by iCAD. Id. at 1-2. Xoft opposed the motion to amend, claiming (1) that it was an incorrectly filed Rule 15(d) motion to supplement and (2) that it failed to allege facts sufficient to add iCAD as a defendant. Id. at 6. Although Judge Thynge treated the motion to amend as a motion to supplement, she granted the motion, noting that the standard for a Rule 15(d) motion to supplement is essentially the same as a Rule 15(a) motion for leave to amend a complaint. Id. at 7. Judge Thynge further held that the facts alleged in the supplemental complaint in support of the plaintiffs' inducement claim were sufficient to meet the pleading requirements of Iqbal and Twombly. Id. Allegations that the merger agreement between Xoft and iCAD permitted the sale of accused infringing products, that Xoft directly infringed the plaintiffs' patents, and that iCAD had knowledge of these alleged facts, were sufficient "to apprise iCAD of the claims against it." Id. at 8.

Continue reading "Judge Thynge: Plaintiffs’ Motion for Leave to Amend Complaint GRANTED" »

Magistrate Judge Thynge recently addressed whether a party is required to produce witnesses for depositions who are employees of its foreign subsidiary, or whether the party should seek that information pursuant to the Hague Convention. Ethypharm S.A. France v. Abbott Laboratories, C.A. No. 08-126-SLR-MPT (D. Del. Nov. 15, 2010). Plaintiff argued that defendant should produce the witnesses to testify because defendant had “control” over information possessed by its wholly-owned subsidiaries. Id. at 5. Specifically, defendant “has the legal right to obtain discoverable information at issue as a result of its acquisition of [the foreign subsidiary] and must produce information sought by [plaintiff] under the Federal Rules of Civil Procedure, rather than requiring [plaintiff] to seek that information pursuant to the Hague Convention.” Id. at 6. Defendant responded that the real issue is that procedures for compelling depositions under the Federal Rules or the Hague Convention cannot be invoked. Id. Specifically, the “foreign nationals at issue are not asserted to be subject to the subpoena power of United States courts, have not been served with deposition subpoenas, and are not asserted by [plaintiff] to be officers, directors, or managing agents of any party to this action.” Id.

Judge Thynge denied plaintiff’s motion to compel defendant to produce employees of its overseas affiliate for depositions. The court agreed with another district court that “Rule 30 of the Federal Rules of Civil Procedure does not require a party to litigation to produce persons for deposition who are merely alleged to be in the party’s control. Rather, a party or any other person can be noticed for deposition, and subpoenaed if necessary. If the person sought for deposition is not within the subpoena power of a United States Court, then procedures according to international treaty must be followed.” Id. at 18 (internal quotation omitted).

Ethypharm S.A. France v. Abbott Laboratories, C.A. No. 08-126-SLR-MPT (D. Del. Nov. 15, 2010)

Recently, Judge Thynge issued a memorandum order on a motion to bifurcate in Masimo Corp. v. Philips Elec. North Am. Corp., C.A. No. 09-80-LPS-MPT (D. Del. Oct. 6, 2010). Judge Thynge previously granted Plaintiff's motion to bifurcate Defendant's anti-trust and patent misuse counterclaims. Now, Defendant moved to trifurcate the trial into separate sections for invalidity/infringement, anti-trust issues, and damages -- or, in the alternative, to bifurcate the case into invalidity/infringement and damages/anti-trust. Judge Thynge rejected both alternatives, holding that the usual issues of judicial economy, prejudice, and juror comprehension weighed in favor of trying invalidity, infringement and damages together.

The extent to which the previous bifurcation affected Judge Thynge's decision is unclear. The previous bifucation is discussed in the order, but not as one of the factors cutting against further bifurcation. On the other hand, judicial economy was a big factor weighing against further bifucation, including the overlap of evidence between damages and infringement, and Defendant's low likelihood of success at proving non-infringement or invalidity. This stands in contrast with Judge Robinson, who usually grants bifurcation in the interest of judicial economy.

In any case, Judge Thynge included a footnote leaving the door open, at least, to a stay on the presentation of damages evidence at trial until the jury renders a verdict on liability.

Masimo Corp. v. Philips Elec. North Am. Corp., C.A. No. 09-80-LPS-MPT (D. Del. Oct. 6, 2010)

In a recent discovery dispute before Judge Thynge in a sham litigation case, plaintiff filed a motion to issue letters rogatory seeking discovery related to the prosecution of defendants’ patents. Ethypharm S.A. France v. Abbott Laboratories, C.A. 08-126-SLR-MPT (D. Del. Nov. 2, 2010). Defendant asked that the court insert a restriction that plaintiff may not seek discovery about possible inequitable conduct during the prosecution of a patent not at issue in the litigation. Id. at 6. Plaintiff argued that possible inequitable conduct relating to the unrelated patent was relevant to “whether the patent applicant was simultaneously engaging in inequitable conduct in connection with other patents for a different version of the same product,” and whether “the history of the [unrelated patent] motivated [defendant and its non-party subsidiary] to engage in inequitable conduct in the prosecution of the [patents at issue].” Id. at 10. Judge Thynge denied plaintiff’s request, however, because plaintiff did not plead or argue in its briefs that the unrelated patent “bears such an immediate and necessary relation to the enforcement of the [patents at issue] that a demonstration of inequitable conduct in the prosecution of the [unrelated patent] will render the [patents at issue] unenforceable.” Id. at 11. Allowing discovery into any inequitable conduct during the prosecution of the unrelated patent, “would authorize a fishing expedition beyond that which is nominally permitted by the Federal Rules.” Id.

Ethypharm S.A. France v. Abbott Laboratories, C.A. 08-126-SLR-MPT (D. Del. Nov. 2, 2010)

Earlier this week, in Carl Zeizz Meditec, Inc. v. Xoft, Inc., C.A. No. 10-308-LPS-MPT (D. Del. Oct. 13, 2010), Judge Thynge issued a report and recommendation that defendant Xoft's motion to transfer be denied. According to Judge Thynge, "Xoft is incorrect to suggest that mere incorporation in Delaware represents insufficient public interest to litigate in Delaware. As stated earlier, 'Delaware has an interest in litigation regarding companies incorporated within its jurisdiction.'" Id. at 9. Thus, because defendant is incorporated in Delaware, and the other factors "do not strongly favor transfer," the motion was denied. Id. at 9-10.

This is consistent with the actions of other Delaware judges, who generally hold that a defendant's incorporation here is enough to deny a motion to transfer, absent other factors. Other judges, sitting by designation, seem to hold the other way. See, for example, Judge Pisano's two grants of motions to transfer, and his statement that "the lack of connection to Delaware deems the [Defedant's incorporation here] of less significance." Mekiki Co., Ltd., v. Facebook, Inc., C.A. No. 09-975 (JAP), at 7 (D. Del. June 7, 2010))

Carl Zeizz Meditec, Inc. v. Xoft, Inc., C.A. No. 10-308-LPS-MPT (D. Del. Oct. 13, 2010)

Controlling costs and increasing efficiency are vital components of any patent-protection strategy. A recent memorandum order by magistrate judge Mary Pat Thynge highlights these concerns in the context of reexamination. By directing that a patentee's trial counsel may participate in a later reexamination even after viewing a defendant's confidential information, the Court avoided an economically disruptive outcome for the patentee.

In particular, the Court emphasized that "[f]orcing plaintiff to rely on less knowledgeable counsel during reexamination would . . . increase costs and duplicate effort." It would also create litigation inefficiencies:

"[B]ecause reexamination (especially inter partes reexamination) is an increasingly important venue for challenging a patent's validity, preventing trial counsel exposed to defendants' confidential information from fully participating in reexamination proceedings would force plaintiff to split its resources between two fronts of the same war."

Xerox Corp. v. Google Inc., C.A. No. 10-136-JJF-MPT (D. Del. Sept. 8, 2010) (Thynge, M.J.).

In Cordance Corp. v. Amazon. com, Inc. et al., C.A. No. 06-491-MPT (D. Del. July 23, 2010), Judge Thynge recently presided over a bench trial on defendants’ claims that plaintiff was guilty of inequitable conduct. During prosecution of the patent in question, the patent inventor swore that he conceived the invention prior to the effective date of another patent that formed the basis for the PTO's rejection of the patent application. Id. at 7. Defendants argued that the patent inventor “intentionally misled the PTO” by making several misstatements. Id. at 12. Judge Thynge ultimately found, however, that defendants’ “purported examples of inconsistent testimony” and “lack of factual support for [the patent inventor’s] declaration to the PTO that he was diligent in reducing his [invention] to practice[,]” among other things, were insufficient to prove intent to deceive by clear and convincing evidence. Id. at 27-34.

Cordance Corp. v. Amazon. com, Inc. et al., C.A. No. 06-491-MPT (D. Del. July 23, 2010)